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2017 (6) TMI 91 - HC - VAT and Sales TaxTaxability - sale of flavoured milk - petitioner is selling "flavoured milk" in the name of "Amul Elaichi Shake" and "Amul Coco Shake" in tetra brick packaging. The said "flavoured milk" is a type of processed milk in which some permitted flavours, colour and sugar are added before they are packed as aforesaid for sale - whether the sale of such "flavoured milk" is subject to payment of tax under the U.P. Sales/Trade Tax Act, 1948? - Held that: - 'milk' is not taxable whereas certain forms of the 'milk' such as condensed milk, milk powder or baby milk are taxable. In exercise of its power under Section 3-A of the Act the State Government notified tax @ of 6% w.e.f. 07.09.1981 upon milk powder, condensed milk, baby milk, baby foods and all other food stuffs or products, whether used as such or after mixing them with any other food stuff or beverage, when sold in sealed tinned containers. A combined reading of Section 4 of the Act and the aforesaid notification would reveal that milk other than condensed milk, milk powder and baby milk stand exempted by the State Government from payment of tax under the Act with the exception of certain forms of milk, milk products and products sold in sealed containers. Section 4 of the Act exempts milk from tax. It does not refer to raw milk. The 'milk' as exempt would therefore include within its fold all forms of milk unless otherwise excluded. Thus, hot or boiled milk, cold milk, flavoured milk, bottled milk except the forms of milk which have been excluded specifically from the exemption stand ousted from tax net under the Act. Generally, milk is either sold raw or after some processing such as boiling or cooling to make it usable for a longer time but such processing even that of pasturising does not alter the nature of the milk or its characteristic. Even if milk is condensed, skimmed or toned it remains a milk though its form may change - as flavoured milk is basically a milk that stands exempted under Section 4 of the Act read with notification dated 31.01.1985 whether sold in open form or in sealed containers. The "flavoured milk" in controversy is a form of milk which is exempt from tax under Section 4 of the Act as no notification prescribes for levying tax upon it even if it is sold in sealed containers - the demand notice as well as assessment orders dated 08.09.2006 and 2006-07 and 2007-08 demanding and assessing tax on the sale of "flavoured milk" in sealed packs are not sustainable - petition allowed - decided in favor of petitioner.
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